We Donâ€™t Need No Education
James Altucher posted an interesting article and video making the case against sending your children to university. I commend him for questioning the credo that everyone should go to university, regardless of interest or aptitude. But I am not totally convinced by his analysis.
Altucher gives short shrift to the fact that many good jobs require a university degree, even if it might be possible to acquire equivalent skills and knowledge other ways. (However, credentialism is consistent with his description of university education as â€œa self-perpetuating Ponzi scheme.â€)
His core argument is that investing money in bonds could provide a better financial return than investing it in university:
The differential in lifetime income between a college graduate and a non-college graduate over a 45 year career is approximately $800,000. If I put that $200,000 that I wouldâ€™ve spent per child to cover tuition costs, living expenses, books, etc. into bonds yielding just 3% and let it compound for 49 years (adding back in the 4 years of college), I get $851,000.
An obvious retort is that there are also non-financial reasons to attend university. But my quibble with Altucherâ€™s financial argument is the assumption that a four-year degree costs $200,000. Thatâ€™s $50,000 per year.
A single university student can realistically live on half that amount or less, which leaves $25,000 for tuition, books, etc. Tuition fees are too high, but they are nowhere near that high at Canadian universities. I do not think they are that high at most American colleges, especially after deducting grants and scholarships from the sticker price.
Furthermore, why assume that students must necessarily rent their own accommodation, buy their own groceries, etc.? People from rural areas, or who cannot get along with their parents, may need to leave home.
However, living at home is a completely viable option for many if not most prospective undergraduates. For example, Altucherâ€™s kids could presumably enrol at any number of excellent colleges in New York City. Leaving for graduate school after that entails fewer years and greater opportunities for scholarship funding.
It seems to me that Altucher makes an excellent case against sending your children away to super-expensive private colleges. However, there are far more affordable ways to get a financially, intellectually and socially rewarding university education.